Malaysian low cost carrier (LCC) AirAsia Bhd has signed a joint venture agreement in China to establish a low cost carrier (LCC), with its hub in Zhengzhou, citing the city’s “strategic location and importance as a logistics hub”.
AirAsia (China) is a joint venture between AirAsia, state-backed financial firm Everbright Group and Henan Government Working Group.
AirAsia (China) will also invest in aviation infrastructure, including a dedicated LCC terminal at Zhengzhou airport (CGO) and an aviation academy to train pilots, crew and engineers, as well as maintenance, repair and overhaul (MRO) facilities to service aircraft, the carrier said in a statement.
AirAsia Group CEO Tony Fernandes said the carrier chose Zhengzhou “due to its strategic location and importance as a logistics hub. As China’s gateway to Europe, Zhengzhou sits at the center of a vast rail, highway and air transport network that forms the linchpin of China’s development plans for its central and western regions.
“With President Xi Jinping’s vision for One Belt, One Road, Zhengzhou is set to become even more important … as the heart of low-cost air travel in North Asia,” Fernandes said on Sunday.
The Kuala Lumpur-based carrier has offered a belly cargo product for some time and also added to its cargo offering, launching its Redbox express courier product in August 2014.
He added: “This Chinese venture represents the final piece of the AirAsia puzzle. In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, Philippines, India and Japan, with China closing the loop on all major territories in Asia Pacific.”
AirAsia and AirAsia X – the long-haul division of AirAsia – currently fly to 15 destinations in China, but do not yet operate to/from Zhengzhou where China Southern Airlines is the dominant carrier controlling nearly 23 per cent of weekly capacity.
Malaysian Prime Minister Najib Razak, who is on an official visit to China, witnessed the signing of the joint venture agreement.